compensation from 457 used for 401k plan

Employer has 401k and 457b plan.  An HCE will terminate 1/1/19.  He thinks he can take a distribution from the 457b plan, and have that count as compensation for the 401k plan (which he could defer on and get matched.)

I don't work on 457b plans but this doesn't seem right (?)  The document says compensation excludes payments received by a nonqualified unfunded deferred compensation plan, only if the payment would have been paid to the employee at the same time if the employee had continued in employment.

How do the 457b and 401k rules integrate with respect to compensation?  Thank you!

NQDC payments to a qualified plan participant can be plan compensation (unless otherwise excluded by the document) if paid while still employed - hence the document language you cite. Remember, IRS position is that compensation paid after the employment relationship has severed is not plan compensation except for "post-severance compensation (PSC)" as defined in the plan and the Code, again, reason for your specific plan language. PSC must be pay the person was entitled to receive had employment continued. Since this payment was triggered by termination of employment it cannot be compensation for plan purposes.

This is different than say a 457(f) arrangement, where a person may get a payout at a certain age if still employed (i.e., they vest), in which case such payout would potentially be plan compensation unless excluded (per your cite) or not otherwise covered under the plan's definition.